Ski area deal finalized

Intrawest brings financial resources to table

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Combination ski passes still uncertain

Intrawest's acquisition of the Steamboat Ski & Resort Corp. does not signal the arrival of bargain season passes for locals.

However, the completed sale could mean Front Range skiers and riders will be able to purchase some form of pass that would entitle them to enjoy the slopes at three Colorado resorts, including Steamboat.

Overnight, Steamboat finds itself aligned with two competing resorts, Winter Park and Copper Mountain, as part of Intrawest Mountain Resorts. Intrawest owns Copper Mountain and has a contract to manage Winter Park/Mary Jane for the city and county of Denver.

The new alliance is potentially very good news for people already buying the discounted Winter Park/Copper season pass, and, in particular, young adults from Steamboat attending college on the Front Range.

"We're now part of a three-mountain company, and they are all essentially 90 minutes apart," Ski Corp. President Chris Diamond said. "That's an exciting triangle."

Diamond said no discussions about potential pass offerings have taken place, but he expects they will.

"There's probably a product that would be very attractive to the Front Range market that has some sort of Steamboat option," Diamond said. "We just don't know what it is."

The early season price for a Rocky Mountain Super Pass good at both Winter Park and Copper this ski season was $369. It allows 164 days of skiing and riding.

Yampa Valley skiers naturally covet a similar pass, but Diamond consistently has said those rates don't make economic sense for pure destination resorts like Steamboat, which do not attract day skiers from Denver.

"When you're as remote as we are, we're not in a situation where we can move the market," Diamond said. "Copper and Winter Park can move the market."

David Barry, chief operating officer of Intrawest Mountain Resorts, said he sees an opportunity to grow market share by promoting the three ski areas together.

"Some of the brightest minds in the ski industry are here and in Copper and Winter Park," Barry said. "It would be really good to work on that together."

Barry said there is significant opportunity to market the three ski areas in Colorado in combination to international travelers. They are known take longer vacations and are willing to tour a region, he said.

"Steamboat is the most recognized brand internationally," Barry said. "A combined effort is definitely very additive to Intrawest's overall efforts."

- Tom Ross

photo

Resort employee Brandon Solarski shovels snow at the Steamboat Ski Area on Thursday. American Skiing Co. finalized its sale of the resort to Intrawest on Thursday.

— Steamboat Ski and Resort Corp. employees went to work this morning for a new owner - one that has the deep pockets never possessed by American Skiing Co.

Intrawest finalized its $265 million purchase of the Steamboat Ski Area on Thursday, and Ski Corp. President Chris Diamond was quick to note what his new bosses bring to the table.

"I think it will be the same kind of operations," Diamond said. "That's the good news, but the added good news is we're going to have more resources across the board, and one of those resources is financial."

Fortress Investments acquired Intrawest last year for $2.8 billion, giving Intrawest access to a new source of capital. Many look at what Intrawest has done at its other resorts and see it as a sign that the company will invest significantly in both the ski area and the base area, something ASC was unable to do because of its crippling debt.

Diamond and David Barry, Intrawest's chief operating officer for mountain resorts, said it's too early to identify any specific plans for capital improvements at the ski area. But both expect those discussions to take place sooner rather than later.

"Until 2 p.m. today, Chris and I couldn't go for coffee without the attorneys coming," Barry said, citing anti-trust laws. "Now that we have a transaction that is closed, we're going to be able to devote some time and energy and some careful thought as to the future."

Diamond, however, mentioned some of the improvements that already are part of the ski area's master plan, including re-grading of the beginner terrain at the base of the mountain and building a six-passenger lift from the base area to Thunderhead.

"Will we be in the position to do something this summer? It's too early to say," Diamond said. "There are just too many moving pieces. The good news is that it's March 1 and not April 1."

Diamond said they should have a better idea of what projects could be completed this summer by the end of the month.

Barry also acknowledged the learning curve for he and other Intrawest officials. He said they need to get to know the community and decide what part they play in making "Steamboat more like Steamboat."

Intrawest coined a similar phrase at Winter Park, where the company has set out to develop the resort while "making Winter Park more like Winter Park."

Intrawest has "been around a long time, we've been successful a long time, and none of us got here by being either cavalier or frivolous with the kind of investments we are going to make," Barry said. "You will see that we will be very careful, and one of my personal concerns is managing the level of expectation from within the community because there are probably some people in Steamboat that are expecting the Wells Fargo truck to pull up with the bags and bags of money, but it's important to make the right decision at the right time for the future of the resort."

Barry said one of the most valuable assets Intrawest has purchased is the existing Ski Corp. management team and staff.

"We think the way Doug Allen and his team maintain lifts here is probably the best in the world," Barry said. "The air program is unique and extremely successful."

Barry also reiterated a point made by previous Intrawest officials - that they did not purchase Steamboat Ski Area for the redevelopment opportunities. Intrawest, Barry said, is interested in Steamboat's ski business.

When asked whether Intrawest, which is known as a resort real estate development company, was considering purchasing the Sheraton Steamboat Resort, Barry replied, "I'm really not in the position to comment on that, and we're still figuring out where we're at and where we're going."

Sheraton General Manager Chuck Porter could not be reached Thursday for comment about the sale process.

Thursday's deal between Intrawest and American Skiing Co. brings an end to ASC's 10-year run as the resort's owner. Included in the sale are the resort and all resort-owned operations, all of Steamboat's resort-owned real estate assets, the commercial core of the Steamboat Grand Resort Hotel and the company's interest in the Walton Pond Apartments complex.

With the Steamboat purchase, Intrawest now has interests in 11 North American ski resorts. It owns Copper Mountain and manages Winter Park, which is owned by the city and county of Denver. Barry, who started working for Intrawest in 1991 as director of marketing and sales for Tremblant, oversees the U.S. operations.

Fortress Investments became a publicly traded company Feb. 9. It was the first U.S. hedge fund and private equity firm to go public. The price of the stock doubled on the day of the initial public offering, going from $18.50 to $35 a share. The IPO on the New York Stock Exchange raised about $635 million and gave stockholders an 8.6 percent stake in the company. Fortress is a profitable company, collecting about $255 million in management fees in 2006. In total, the company manages about $30 billion in investments. Shares of Fortress (FIG) were down 3.65 percent Thursday, closing at $29.07.

- To reach Matt Stensland, call 871-4210

or e-mail mstensland@steamboatpilot.com

Comments

dave mcirvin 7 years, 9 months ago

Optimism for mtn improvements may need to be balanced by some concern when fully realizing Fortress is a profit seeking hedge fund. Any folks who have skied Whistler-Blackcomb first 20 years ago and then more recently might readily agree that significant mtn and dwelling development will likely be in the works. Admittedly, improvements will warrant higher season pass prices, skier/rider visitors and food/beverage prices. Any one who has viewed the Honua Kai development in Kanapali on Maui will admit Intrawest-Fortress is a formidable company highly focused on profits albeit with the foresight toward customer satisfaction. So this isn't likely to be like your parent's Alta nor your ole 1980's Stbt...

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